Professional Documents
Culture Documents
Inadequate investment.
Who needs Financial Planning?
Whatever may be level of your
income or assets , you need
financial planning.
Gold
Art Debt
Mutual Funds
Financial
Planning
Insurance Equity
Types of goals.
Housing
Children
Marriage
22 yrs 60 yrs
Age
Type of Assets
Assets – Cash, Savings a\c,
(1) Liquid
Floating rate mutual fund. Ideal for
short term goals.
(2) Income generating Assets – Bank
F.D.,PPF, NSC, Bonds. Ideal for
medium term goal.
(3) Capital appreciation Assets –
Equity- Shares, Real Estate, Gold, Art.
Ideal for long term goal.
Financial Planning and Asset Allocation
FEW EXAMPLES OF
ASSET ALLOCATIONS
Financial Planning and Asset Allocation
INVESTOR PROFILE
time.
•Creating long-term wealth for
retirement
Stocks
75%
Financial Planning and Asset Allocation
INVESTOR PROFILE
INVESTOR PROFILE
Term
insurance equal to loan
amount.
Cash Flow Management
Income – Business Expense
= Take home cash.
Take Home Cash – Home expense
- Taxation
- Interest & Installment payments
on loan taken
(2)
Investment in Expense
generating assets ( ? Liabilities).
Income Generating Assets
Regular
Income in form of Interest ,
Dividend , or Rent .
Professional management
Liquidity.
Systematic
regular investment of small
amount possible.
Mutual Fund Types
(1) Debt Schemes.
(a) Floating rate scheme.
Growth plan.
best plan for wealth creation.
Mutual Fund Types
Close Ended
Open Ended
How to invest?
Lump sum investment.
ELSS
(1) Magnum tax gain (2) HDFC Tax Saver.
MIP
(1) HDFC Long Term MIP,
(2) ICICI Prudential Income Multiplier.
Model Portfolio
Profile Equity Equity Balanc MIP, Floating
Diversif Midcap ed Bond rate
ied Sector Fund Fund Fund
Age 20-30 Dependent 35-40% 35-40% 20% 10%
1-2
Age 30-40 30- 20- 30% 10%
Children in school 35% 25%
Age 40-50 Children in 30- 10- 20- 10% 10-
college 35% 15% 30% 20%
Age 50-60 Children 25- 5-10% 20% 20% 10%
marriage Higher 30%
Education
> 60 years Retirement 10- 30% 30- 20%
planning 20% 40%
Income Tax Planning - Tips
Tax planning is legal.
Purchasing power of Unaccounted money
will slowly go down.
No cash transaction possible in Mutual
fund.PAN card copy required.
Make maximum use of tax free income
limit
Create multiple heads of income tax payer.
ELSS investment can be used for income
tax planning & wealth creation.
Income Tax calculation
Taxfree income limit:-
Male Individual & HUF. 1,10,000.
Female individual 1,45,000.
Senior citizen (>65 years age) 1,95,000.
Retirement Plan -
Protection for An essential need Increasing
Spouse Cost of
/Dependents Health
Child’s Marriage
Child’s Education
Housing
Children
Marriage
22 yrs 60 yrs
Age
Financial Planning and Asset Allocation
Rule of 72
72/ Interest rate = No. of years required to double
money.
72/ No. of years required to double money =
% interest return.
2,099,636
Savings Returns *
1,572,834
Start Early
251,568
Rs. 25,000 today 30 YRS.
116,525
20 YRS.
53,973
10 YRS.